HC Deb 14 July 1896 vol 42 cc1493-507

(1.) Where any property passing on the death of a deceased person consists of such pictures, prints, books, manuscripts, works of art, scientific collections, or other things not yielding income as appear to the Treasury to be of national, scientific, or historic interest, and is settled so as to be enjoyed in kind in succession by different persons, such property shall not, on the death of such deceased person, be aggregated with other property, but shall form an estate by itself, and, while enjoyed in kind by a person not competent to dispose of the same, be exempt from estate duty, but if it is sold or is in the possession of some person who is then competent to dispose of the same, shall become liable to estate duty.

(2.) The person selling the same, or for whose benefit the same is sold, and also the person being in possession and competent to dispose of the same, shall be accountable for the duty, and shall deliver an account, in accordance with section eight of the principal Act, in the case of a sale within one month after the sale, and in the case of a person coming into possession, or if in possession becoming competent to dispose, within six months after he so comes into possession, or becomes competent to dispose.

MR. H. C. F. LUTTRELL (Devon, Tavistock) moved to omit Clause 20, in order to afford the Government an opportunity of making a statement of what they intended to do with respect to works of art. He understood from the discussion a few days ago that the Government would make a proposal which would allow of objects of art supposed to be of national interest being open to the inspection of the public on certain days of the year at any rate. Upon the Amendment Paper there was nothing to show the intentions of the Government. The Opposition believed the exemption of works of art from taxation was a retrograde step, because such works were luxuries and ought to be subject to taxation.


feared that he had nothing to add to what he had already said on this subject in Committee. The principle of the clause was that when a person was simply a curator of artistic objects, which rather involved him in expense than gave him any profit, he should not be, chargeable with duty, but that as soon as those objects could be sold the duty should become payable.


said that he wished to know what decision the right hon. Gentleman had come to upon the question of public access to these collections.


was understood to say that he would express his views on the subject when a subsequent Amendment was reached, as it would not be in order for him to do so on the present Amendment.


said that he must vote against the clause if nothing was going to be done to secure that the public should have access to the collections in respect of which the exemption was to be granted.


said that the right hon. Gentleman had exaggerated, no doubt unconsciously, what the Chancellor of the Exchequer had said with reference to this clause. He had had a great deal of consultation with the Chancellor of the Exchequer for a long time with regard to these Death Duties, and he had had many differences of opinion with him, he was sorry to say; but he had always found him ready and prepared to carry out, not only in the letter, but in the spirit, any undertaking he had made. [Cheers.] The right hon. Member for West Monmouth had said that he must vote against this clause on account of something that was not in it; and the hon. Member for the Tavistock division said that he was going to vote against the clause on account of something that was in it—although he was prepared to show the hon. Member that that was not the case. The hon. Member contended that this clause imposed a duty on poor people, and let the rich people off; but he thought the hon. Member had forgotten Clause 15 of the Finance Act of 1894. That clause made it lawful for the Treasury to remit the Estate Duty in respect of such art or science collections, etc., as might appear to the Treasury to be of national, historic, or scientific interest—[cries of "Go on!"]—and which were given or bequeathed for national purposes, or to a university, county council or municipal corporation. [Opposition cheers.] By that clause the richest of conceivable contributors was exempted from the Death Duties, namely, the State. By that clause, also, no such additional conditions were attached as were attached by the clause under discussion.

MR. J. H. DALZIEL (Kirkcaldy Burghs)

thought the hon. Member had hardly shown his usual ingenuity. They always expected from him, especially on financial matters, some important contribution throwing fresh light on the subject; but the hon. Member had, he thought, referred to the worst possible instance from his own point of view. The section which the hon. Member had referred to had reference to exemption in the case of the proprietor of valuable possessions who was going to leave them to the State for the advantage of the people as a whole. If the right hon. Gentleman the Chancellor of the Exchequer would say that the State was going to benefit from these collections, no objection would be raised to the Government proposal. But the view taken by many hon. Members was, that whilst the State was going to give up this large amount of taxation, there was no assurance that the people were going to benefit in a corresponding degree. The right hon. Gentleman had taken up the position that it was impossible to frame a clause which would carry out the object that was in view, although he recognised that some such return as he suggested ought to be given in respect of the remission in taxation. If the right hon. Gentleman empowered the Treasury to determine what was and what was not a national possession, he would be throwing a very great responsibility upon them. In that case, the right hon. Gentleman ought to insert a provision that the Treasury should have reasonable facilities given them for investigating the matter. The right hon. Gentleman had objected that if he were to adopt that course he would be making the Act retrospective, but all he had to do was to say that the provision should not come into operation until the passing of the Act. He hoped that the right hon. Gentleman would admit the force of the arguments in favour of the Amendment, and would accept it. ["Hear, hear!"]

*SIR JOHN LUBBOCK (London University)

said that he was surprised that these collections should be regarded by hon. Members opposite as luxuries. They were not made without great expense and labour, and those who created them were public benefactors, because, most undoubtedly, they conferred a great benefit upon the community at large. He could not understand how it could be contended that scientific collections, which were often of great value and importance, were not of interest to the public, because they were of great use to persons who were studying the particular branches of science to which they belonged. Whoever had heard of persons making scientific collections merely for the purpose of shutting them up in drawers? It was the pride of such collectors to render their treasures available for the purposes of study, nor could it be denied that the owners of valuable pictures had been most generous in affording the public opportunities of seeing them. He thought it would be impossible to put words into a clause of an Act of Parliament which would cover all the circumstances of the case, and he thought they must trust that those who had made these collections would, from the same feeling that had induced them to make them, make it their pride and pleasure to make them accessible to the public in the future as they had in the past. ["Hear, hear!"]


said he had looked very carefully into this matter in accordance with the pledge he had given to the House, and he was as anxious as the right hon. Gentleman opposite or any hon. Gentleman could be that those who benefited by this clause should make some return to the country. But he had been entirely defeated by the extraordinary difference in the kind of articles that would come under the clause and the kind of circumstances in which their possessors would be placed. It would be very easy to lay down some definite regulations on which persons having large collections placed in special galleries should open those galleries for the advantage of the public. They did so now at comparatively very small inconvenience to themselves. But in the case of a man of moderate means, living in a house in London of no great size, and possessing only two or three family pictures of value, surely it would be intolerable to require of such a man that he should admit the public for two hours on six days of the week to view those pictures. ["Hear, hear!"] Obviously no one in such a position would avail himself of the clause, and Parliament would by that tyrannical act deprive a person it was especially desired to favour of the advantages of the clause. ["Hear, hear!"] Then there was the case of a person possessing valuable family manuscripts or books. Why should he admit the public to his library to inspect books and manuscripts about which the public in the ordinary sense would know nothing at all? There were obviously many cases in which the articles to which the clause would apply would be articles of public interest only if consulted by experts, and to admit the public might result in great injury to the articles themselves, while it would not be of the smallest advantage. Further, was this to be a prospective or retrospective provision? If retrospective, how in the world was the Treasury to find out whether admission had been given to the public? The thing would be impossible. Again, if it was to be prospective, was it fair to the possessors—not the possessors of galleries, for in this matter they had to deal with possessors of comparatively few articles of this kind, keeping them in their private houses—would it be fair to place a person owning articles of this kind in such a position that he might be invaded every day by some passing traveller? ["No!"] That would be a rod hanging over him. Anybody might say, "I understand you have this picture, and I claim to see it as one of the public, and if you do not give me the opportunity I shall complain to the Treasury." He had carefully considered the matter, and, looking to all these difficulties, he felt that if he attempted to lay down any provision which would be fair and not too harsh, he would really be proposing to Parliament to enact something which was very much less than was given to the public now voluntarily by the owners of great collections; he would be suggesting to such owners that they should diminish the facilities they now afforded, and would he doing much more harm than good. ["Hear, hear!"] Having in view the reasons for this clause, on which he had already, he thought, said enough, he trusted the House might not be disposed to embody in it a provision which might suggest to the owners of important collections to deprive the public of the advantage they now received, and which might in its operation be extremely hard to the very persons whom every person desired to benefit. ["Hear, hear!"]

*SIR SAMUEL MONTAGU (Tower Hamlets, Whitechapel)

considered the right hon. Gentleman adduced no real argument against the desires expressed on the Opposition side of the House. He felt justified in saying a few words upon this subject because he originally proposed an Amendment to the Finance Bill of the last Government in order to exempt bequests to the nation from the Death Duties. He protested against the proposal of the present Government to exempt certain articles in private hands without any return whatsoever. The Chancellor of the Exchequer had mentioned the cases of those who possessed in London one or two pictures. There was a complete answer in such cases. No one expected them to admit the public to private houses. They could lend them to one of the various exhibitions which were always very willing to exhibit works of art which were of interest to the public. They had a very generous example in Her Majesty the Queen, who lent constantly to different exhibitions. It was really to prevent the selfishness of certain persons that they desired a general rule should be applied by which the Treasury could decide whether articles were of historic and artistic value. They could ascertain very readily whether they had been exhibited in galleries in London and the provinces. Nothing could be easier than to ascertain whether such articles had been exhibited, because records were always kept. It had been said that these exemptions would prevent works of art being sent out of the country. He did not believe that would be the effect. They had had heirlooms sold very frequently, before the introduction of the Finance Bill, or of anything of the present nature, and he believed they really imported more works of art from abroad than they exported. There was no danger of private houses being invaded, as the Chancellor of the Exchequer had suggested, as there was nothing easier than for the owners of works of art to offer them to the galleries in London and the provinces. He should, therefore, vote against the clause.

Mr. COURTENAY WARNER (Stafford, Lichfield)

observed that hon. Members did not desire private houses to be thrown open for two hours upon six days of the week or anything of that kind. What they were asking was that those collections which were valuable should be made accessible to students. The Treasury would be able to decide what inconvenience the owner was to be put to. The Museums or National Gallery should have lists of the most important of these works of art and collections, and they should be able to grant leave to students to go and see them at such times as the owners should decide. This clause was a proposal to remit a tax on private individuals who did absolutely nothing for the public. He hoped the Chancellor of the Exchequer would see his way to make some modification in the wording of the clause in the direction which had been suggested.

Mr. EDWIN LAWRENCE (Cornwall, Truro)

said that private collections of rare and valuable books and works of of art were of great advantage to the country. In private establishments they were kept intact. In public museums they would probably be soon damaged.

MR. J. W. LOGAN (Leicester, Harborough)

said he did not think those who collected works of art from disinterested motives desired to escape their fare share of the taxation of the country. If collections, which were only of interest to students and not to the general public, went untaxed on that account, the poor people of this country would have to make up the deficiency. Works of art were collected for the pleasure derived from them, and because they did not yield any money income was no reason they should not be taxed. If any works of art were of national interest, then let the owners make them over to the nation. On behalf of the poor people of this country, he protested against the clause which taxed the poor for the benefit of the rich.

MR. T. R. LEUTY (Leeds, E.)

said the proposal contained in the clause was part of what had been described as "a rich man's Budget," and it was the most indefensible and disgraceful part. The bulk of the money under the clause would go to those who had the most already. It was quite touching to see how unanimity spread over the benches opposite when the question was one of giving relief to those who had the most. Differences of opinion which were accentuated when it was an ecclesiastical or educational question, disappeared when it was a question of dipping into the public purse in order to give relief in due taxation to those who possessed the luxuries of life. It was said that the clause was intended to save some poor miserable owner from selling his picture. If a man were in such a state of poverty that he could not pay the duty, how could relief from the duty enable him to keep the picture? It was certain that a man in such circumstances would sell the picture.

Question put, "That the words of Clause 20 down to the word 'and', in line 31, stand part of the Bill."

The House divided:—Ayes, 213; Noes, 82.—(Division List, No. 332.)


said that he did not intend to move an Amendment of which he had given notice, but he hoped the Chancellor of the Exchequer would give an assurance on the point just decided, and adjourn the Debate until to-morrow.


said that he understood it was the desire of the House to finish the Bill that evening. [Cheers and cries of "No."]

*MR. B. L. COHEN (Islington, E.)> moved to omit from sub-section (1) the words:— not, on the death of such deceased person, be aggregated with other property, but shall form an estate by itself, and while enjoyed in kind by a person not competent to dispose of the same, be exempt from Estate Duty, but if it is sold, or is in the possession of some person who is then competent to dispose of the same, shall become liable to Estate Duty, and to insert, instead thereof, the words:— On the death of such deceased person be valued and aggregated with the other property of the deceased person, but shall be exempt from Estate Duty while enjoyed in kind by a person not competent to dispose of the same, but if it is sold, or if it passes into the possession of some person who is then competent to dispose of the same, it shall become liable to Estate Duty at the same rate at which the other property of the estate of the deceased person was assessed. The Chancellor of the Exchequer would, the hon. Member said, see that this Amendment did not in any way interfere with the exemption from duty of works of art in the Bill, but was intended to come in aid of the Exchequer and to prevent the relief which the Bill afforded to those works of art from being extended to them in a manner he should think not anticipated by, and certainly not just to the Exchequer. The late Chancellor of the Exchequer cited the case of an estate of £1,000,000, of which £500,000 was in works of art and £500,000 in Consols. The effect of the Bill in such a case was not only to make a present to that estate of £40,000, but, in consideration of that present, it would make a further present of £5,000 out of the duty paid by Consols. That was a case so extreme that it would rarely arise. There were, however, at this moment a large number of estates of half-a-million to a million, and the number was increasing year by year, which included large collections of works of art, which answered to the description in the Bill. It was monstrous that those estates should have the duty which properly devolved upon them under the Finance Act of 1894 reduced simply because the owners of those valuable properties had thought fit to invest a fifth or a tenth of their fortunes in works of art for which they ought to pay duty at the full rate prescribed by the Finance Act of 1894. The only plea which could be urged against his Amendment was the hardship which it was alleged would result on small estates. But let him point out, in the first place, that the amount of difference on a small estate of £10,000 to £25,000, or £50,000, would be small, and, in the next place, there could not be a farthing difference at all unless the estate was just on the borderline fixed by the Finance Act of 1894. The Chancellor of the Exchequer was giving away money which he could never recover. The large estates did not ask for it, and he believed they would be the first to realise they were not entitled to it.


said it seemed to him that the Amendment was a most reasonable one. As the hon. Member had pointed out, they had already made the man of great fortune a present of £40,000 in respect of one part of his fortune, and as to the rest of his fortune they proposed to put that on a lower scale. A more monstrous injustice than that it was impossible to conceive, and he felt sure that when it came to be understood it would be universally condemned. They were now dealing with the very wealthy, and the Government proposed to give them an exemption which could not be defended on the ground of the character of the property. When they came to deal with the residue of the fortunes of those rich men and then found they were giving them a special exemption merely on the ground that they had property which was after all, property of luxury, it would be regarded as one of the most indefensible financial propositions it was possible to make—a proposition which, when it came to be worked out in practice, and when it was seen what were the character of the fortunes which had enjoyed this exemption from the taxation which fell upon other people, would be so universally condemned that an Amendment of it would become absolutely necessary. The hon. Member opposite had said very truly that it would not at all affect the people who had got less than £25,000, but in those other cases, where a man had a picture or historial ornament of some kind or other, it was quite enough in his opinion, to exempt him from payment of that article. To say, however, that the possession of that article was to affect his taxation upon the whole of the rest of his worldly possessions seemed to him to be a monstrous exaggeration of the principle of this clause. He hoped the Government, in the interests of the clause itself, would accept the Amendment.


said his right hon. Friend the Chancellor of the Exchequer had stated, when he was dealing with the clause itself—as to which the right hon. Gentleman opposite expressed his sympathy—that, from his information, he did not think the reduction which would result from this clause was likely to be a large one, but that if it should be shown by experience that the great estates would be those which would escape duty by virtue of its provisions, obviously it was a matter that would have to be considered. He would respectfully submit that it was not the great estates which would be dealt with unfairly if this Amendment were not carried. The right hon. Gentleman opposite was aware that taxation did not increase above the 8 per cent. upon £1,000,000 and over; and, therefore, the suggestion that £30,000 or £40,000 or some such sum would go to the millionaire if this Amendment were not adopted was, he thought, one which would not bear the test of investigation. If this Amendment were adopted, not only would there be the greatest practical difficulty in working the matter, but what was, to his mind, much more important, a great injustice would be done. It was, no doubt, the fact that in the case of fortunes between £25,000 and £50,000 and £75,000, the possession of a work of art might change the tax from one class to another. It would be unjust to put an additional tax on a man's property because of the fictitious value added to that property by virtue of his possession of a work of art, after the House had already to exempt such articles from taxation. The Amendment, if adopted, would create great difficulty, having regard to the decision the House had previously come to, and in those circumstances they had no right to treat this kind of property as taxable for the purposes of aggregation.


said that the Attorney General had put forward matters as great difficulties which were not difficulties to anyone but a lawyer. [Laughter.] The hon. and learned Gentleman had spoken about millionaires, but there was some misapprehension as to what a millionaire really was. It seemed to be supposed that he was a man who possessed so many hundreds of thousands of pounds; but that was an error. A "millionaire" did not mean anything of the kind. "Millionaire" was a French and not an English word, and it really meant a man who had a million francs. [Laughter, and cries of "Only £40,000."] That was to say £40,000. He and his friends would most undoubtedly make it their business to get this decision of the Government reversed. They would go to the country. [Ironical cheers.] What were they there for? They had opinions and they wished the country to hold the same views. They would point to the Rothschilds and the Duke of Westminster and show what advantages they got under this Bill. The Attorney General was still more astounding when he came to speak about small estates, for, he said, if a man had £25,000 in Consols or in anything else, and £10,000 in a picture, it would be cruel to make him sell the picture. He thought the man would be a perfect fool if he did not sell it. He always regarded Charles Surface as a most sensible man in selling his ancestors. He had no ancestors to sell, but if he had he would sell them at once. In his opinion in the case cited by the hon. and learned Gentleman the man ought to pay on the £35,000. His blood boiled—[laughter]—he did not know whether it was owing to the introduction of this Bill or the heat of the weather, but his blood really did boil. [Renewed laughter.] He was not using a figure of speech. He was perfectly shocked at the way in which, when an intelligent Member opposite proposed a reasonable Amendment, the Attorney General was put up to defend the Bill against his own follower. He congratulated the hon. Gentleman upon saying that nobody opposite wanted to protect large estates, he always thought that some of them did, but he was glad to find that they did not. The Opposition wanted justice to be done in regard to both large and small estates. They were not desirous, on his side of the House, that the rich man should be deprived of his property; but they were desirous that he should pay his fair share of taxation.

*SIR JOHN LUBBOCK (London University)

said that the supporters of the Amendment seemed to think only of the interests of the Treasury or of the owners, and to forget those of art and science. They wished to encourage the formation of collections, and he was sure that all those who had the interests of science and art at heart would thank the Chancellor of the Exchequer for the step he had taken.


desired to point out that the interests of millionaires would not be affected by this clause. Their estates would pay eight per cent. in any case. It did not exempt from taxation the kind of property to which it referred; it only postponed the payment of duty until the property passed into the hands of a person competent to sell it. The right hon. Member for West Monmouthshire declared that it was a monstrous doctrine that the rate of taxation to which a property was to be subject should be affected by the possession of a picture or other valuable object. And yet that doctrine was the foundation of the right hon. Gentleman's own Finance Act! His sympathies were not on the side of the millionaire, but on the side of unfortunate people like Mrs. Cox, the Herefordshire washerwoman, who had to pay £5 on her miserable tumble-down cottage, because another cottage was left to somebody else, and because the value of the two cottages taken together was over £100. The right hon. Gentleman could not logically object to a principle which he had himself introduced in an Act of Parliament. What was proposed in this clause was that certain property should be segregated. There was nothing new in that proposal, for there were at least seven instances of it in the Finance Act of 1894. One instance was the case of property given to the nation, and another the case of the Indian pension. It was a little late to complain of the principle embodied in this clause, and he could see in the Amendment of the hon. Gentleman a great deal of difficult work for the Revenue for which there was no justification.


, who spoke amid cries of "Divide," said the Government did not care two straws about the case of Mrs. Cox which was referred to by the hon. Member for King's Lynn, all they cared for was the putting down of an Amendment of this character. The right hon. Member for the University of London said that the care on the opposite side of the House was for art and science, but what had that to do with this Amendment? It was not a question of exempting the value of these art treasures. The best thing to do with this miserable kind of legislation was to get it out of the way as quickly as possible, and then at any rate they would be spared the sight of members of the well-to-do classes brought down to the House from their rides in Hyde Park in the afternoon to parade their fictitious rags in order to obtain the commiseration and doles of the House.

Question put, "That the words proposed to be left out stand part of the Bill."

The House divided;—Ayes, 170; Noes, 55.—(Division List, No. 333.)

Clause 25,—